I’m Back

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Well guess who is back. I have been conducting classes for the past four days and travelling for two of them so I have, unfortunately, neglected you. One of the sessions was on Customer Service and the other was on Parts Management. We start into a two day session tomorrow on Service Management.

It appears that the interest in employee development is beginning to pick up from the desperate savings that distributors were driving attempting ever since 2008 and Lehman. The bad news of these savings as noted in a previous blog is that employees see that and make note of it and when business picks up many of them will determine that the grass is greener on the other side of the hill and leave you.

The largest challenge over the foreseeable future is going to be to attract, hire and retain the talent required for the job functions in your business. And this is a very serious problem.

Automation will absorb some of the shortages but not all. Management, or better said leadership, is required to set the tone and the direction for employee development. The time is now.

Change is compelling….change and hope.

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The Canadian Economist John Kenneth Galbraith once said “When mankind is confronted with making a change or proving why they shouldn’t change…. why do people get busy with the proof?” The common excuse for resisting change is the same everywhere – fear. A lot of fears – fear of the unknown, fear of failure, fear that others will be better than we are, a bunch of fears – to the point there is another interesting question to pose to yourselves “what would you do if you weren’t afraid?”  That is the more interesting question.

In our Unit I management training we deal with change and paradigms and I try and get people to understand that resistance to change is both natural and normal. Most of us are settlers not pioneers. The pioneer is the risk taker. They blaze the trail for the settlers. When the pioneer is finished with their explorations the settler will ask “is it safe out there?” Then if the answer is yes off they will go to the new lands. But the options available for the settlers are limited because the pioneer had the first choice.

I submit to you that your customers want you to be leading not following. They want you to lead the changes. And in this world in which we live change has become a fact of life. Change comes in waves it is not incremental. If you don’t get in on the initial waves you want to hope that you can enter later without a large loss. That is an interesting word – hope. Put with the subject of change it is really interesting. How has that worked for you so far? Not all change is good. So you have to be pretty discerning don’t you. You have to be able to evaluate the situation, consider the options and then make a decision. It doesn’t get easier over time. It might in fact lead you to missing out on chances. How do you view change? The time is now.

Generational Changes

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Some time back I looked around a room I was in and noticed that I was no longer the youngest person in the room. Of I course I still felt like the youngest in the room. But think back to when you started your first job. What did you think of the older people around you? Were they to be respected for their age and knowledge? Did you look at them wondering why they did things that particular way? Do you remember working with your father and how he was always telling you how to do things?

I think we in North America have a perverse method of teaching people at an early age. We teach them to be obedient. Now don’t get me wrong there is nothing wrong with obedience and manners. In fact I quite like them both. I do want to take issue with the fact that we are creating robots to some degree. We don’t teach people well enough to be critical thinkers. We don’t teach them to think on their own. And when they do think on their own we label them something – rebels, trouble makers and other names.

I think we need to embrace the younger generation in a more positive manner. Every younger generation gets a bad rap including the current crop of kids (maybe I shouldn’t call them kids). Imagine. They are better educated. They have more computer skills than were dreamt of when I was entering the work force. The attribute that I like the most is that they are not as patient as we were. They won’t put up with the nonsense that some of us endured. Are you ready to listen to what they have to say? Can you imagine that they might have a better way to do something? I get excited when someone asks the question “why do you do it that way?” I want to know what they mean, what they are thinking. There is always the possibility to do things better. You have to embrace these changes as never before. The time is now.

The New Reality – Part Deux

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The juxtaposition of the last two blogs is intriguing. I couldn’t ignore it. I have received a lot of flak about my pronouncement of the New Reality. People suggested that I need to be more careful in how I communicated things. That it could be dangerous, I might frighten some people.

Remember Jeff Bezos – social cohesion at the expense of the truth.

I don’t think anything will get better if we ignore it. I had a wonderful teacher in Grade 8 for geometry. My majors at University were Mathematics and Physics so I rather enjoy arithmetic. But I was stubborn as heck and had a hard time with Geometry. Why??  – Because I refused to memorize the theorems. Sound familiar to any of you? Well I had a special grandmother who I call “Granny the Great” who got her Master’s degree in the 1910’s – a truly amazing woman. She got me in line and by the end of the year I was near the top of the class. I learned to memorize things. Well this teacher told me that it wasn’t going to get any better if I kept putting it off. It was going to get worse. Of course she was right.

Lou Holtz says it well.

  • You have to do your best.
  • You have to do what’s right
  • You have to honor the Golden Rule

I want to add a corollary to this list. You have to know what to do and how to do it. So there is another chapter on the New Reality. Nothing will change until we change. The time is now.

The New Reality

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To properly address the New Reality we have to look backwards. From the 1960’s to 1980 management felt pretty good about things. Sales revenues had increased, profits were up, life was good. We thoguht we must be the greatest generation of business managers ever. But it was all inflation.

When Paul Volcker and the Federal Reserve raised interest rates to kill inflation there was a serious adjustment. Businesses reinvented themselves. Operating metrics became all the rage and we developed business models for everything.

Well in a few years we felt pretty good again. With a couple of exceptions sales went up and profits went up and things were good again. But it was all leverage. With George W Bush at the helm we witnessed some of the most severe disruptions in our lifetimes. But we had to lick leverage and he and his Treasury Secretary Hank Paulson started to get it done.

In 1980 for every dollar of US GDP there was $3.70 of debt. By 2005 that debt had grown to $30.00 (The Trillion Dollar Meltdown). I shudder to think what it is today with our deficits and spending seemingly totally out of control. We are clearly in a new era when the Federal Reserve keeps printiing money and the currency continues to be debased. We have to reinvent our businesses again. We have to repair balance sheets and we have seen that happening. For everyone BUT the goverenments, all governments. Don’t forget I live in California and we make Greece look good.

We have seen encouraging signs in the equipment world. Equipment sales have been up dramatically – 30%+ to 40%+ for two years in a row. But we still have a big hill to climb to get back to the previous peak. This is not going to change for a long, long time – that is the new reality. You will survive and perhaps thrive IF your focus is on Parts and Service and for some of you Rentals. If you don’t have that focus….there is a significant risk to you. The time is now.

The Pursuit of Performance – Change

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Last week on the airplane catching up on my reading I was struck by a quote from Jeff Bezos, the founder and creator of Amazon. “Social cohesion at the expense of truth” This took my mind to the world we live in and change.

Do you remember when Jack Welsh said “when the world around you is changing at a rate that is faster than yours…. the end is near.” Do you remember that? Many of you know that I believe we are in an era of change equally as significant as the Industrial Revolution. And most people resist the changes in their lives either at work or at home.

Joel Barker, the famous futurist, calls it “rocking the boat” using the image of a canoe with three paddlers where one of them uses a kayak double blade paddle – rocking the boat. The double blade paddle is clearly more efficient and effective but it sure rocked the boat with the other two paddlers.

The thing I liked about Mr. Bezos’ comment is how it points out that we are hiding from the truth or hiding the truth in our stubborn determination not to change. In my professional life I have been calling these times the times of the “New Reality.” This not to say that the PIMCO “New Normal” isn’t also an apt phrase to describe the times but I like the “New Reality” better. We have to face the truth not hide it. We have to embrace change not resist it. We have to be open to new ideas not shut them down. There is only one way forward and that is being like the turtle – sticking your neck out. The time is now.

Quest Classes in Dallas

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There is only one week left to register for the Parts Management and Service Management classes in Dallas.

Don’t miss out on this leading edge training.

Register at www.rjslee.com under the Learning tab.

Thanks   see you there

The time is now

 

 

Instore Selling Representatives

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So we have identified the Medium Potential Customers. We know who they are and where they are and what they buy and what they own. Now we can assign them for market coverage. That means we have to select the number of customers that is appropriate for one person to handle. But first we have to deal with the fact that this will not be a Product Support Field Representative rather it will be an Instore Sales Representative. Who is that?

This is all those men and women in your parts department and service department who deal with customers today. This is the service clerks, the counter personnel, the telephone sales support personnel, and the parts office and warehouse personnel. Almost anyone who wants to be involved and who has a “sales” personality would work.

I will assign one hundred customers to each Instore Sales Representative. I will expect that there will be five personnel touches each work day by each Instore Sales representative.  If this is different there is no time like the present to get going. Are you ready? The time is now.

Huggers or Hunters – that is the question

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So we have identified the High Potential Customers. We know who they are and where they are and what they buy and what they own. Now we can assign them for market coverage. That means we have to select the number of customers that is appropriate for one person to handle from a geographical and number of machines perspective. This becomes somewhat of an art form rather than pure science. I don’t like to have more than one hundred and fifty customers in one territory and depending on the split of machine types no more than 450 machines.

You have 3000 High Potential Customers which would provide for 20 territories. What kind of sales people are required for these customers? Well now it comes down to what they buy and what they don’t buy.  If you have a high market share of the customer’s business then you want someone to protect your business – a hugger. If you have a low market share then you want someone to grow your business – a hunter. With either individual you need to go about setting objectives for all the commodities and services you provide. You have to get a better understanding of the competitive landscape. What does your customer/competitor neighborhood look like?

We are at the beginning of being able to take advantage of Product Support Selling now.  For those of you who already employ Product Support Sales Representatives – does you market coverage look like this? If this is different there is no time like the present to get going. Are you ready? The time is now.

Making Segments that Work

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Alright, you have run the reports, established the different levels of purchases, obtained accurate machine populations for the customers and have put this market segmentation code into the name and address record on your computer. Well now you have 64 market segments. I submit to you that this is too many segments to determine a strategy for each segment and have everyone understand. What next.

How about we take all of the Fleet (F) and Large (L) machine population segments that are also either A or B in either of Parts and Service purchases and make them one marketing segment? And let’s take the Medium (M) machine population and all of the C purchases for either of the Parts and Service and make them another marketing segment. Then we will have three segments. What I will call High Potential, Medium Potential and Low Potential.

The High Potential segment customers are the ones that should have a product support sales representatives call of them. The Medium Potential segment customers should be “touched” but perhaps you don’t have the budget to assign a product support representative. What are you to do? Assign and Instore Sales Representative and touch them on the telephone.

Did you know that in America Corporations fail at implementing their strategy 90% of the time? Typically that is because their employees don’t understand the strategy. In order to be able to lead people to conduct themselves in a manner that will allow successful implementation of strategy they have to first of all understand the strategy. Second they have to accept that the strategy is a good one. Finally then they can commit to making it happen.

  • Understanding
  • Acceptance
  • Commitment

We are at the portal of our market coverage strategy. Are you ready? The time is now.